If you are anything like me, you are more familiar with WebMd because of the memes, and less because the actual services it provides.
Like an episode of Grey’s Anatomy, WebMd typically transforms a runny nose into some brand new life-threatening virus and you have less than 24 hours to live. Seriously though, ever notice how no one leaves that Seattle hospital alive? If I had some sort of very basic surgical procedure and they were like, “Don’t worry about it, we are taking you to Merideth Grace Memorial Seattle Hospital (or whatever the hell they call it now) and you’ll get the best care.” I’d be like, “Nope. Its ok. I’d totally rather do the surgery here in my dirty ass kitchen than risk going there and having my arms amputated and liver removed.” For a hospital, the mortality rate is eerily similar to that of Black Plague London.
Anyway. I digress. The point is, WebMd has developed a reputation as being less than beneficial in diagnosing what’s ailing you. But that doesn’t stop them from generating crazy amounts of revenue through very strategic, purposeful, and valuable content marketing.
Let me give you an example. Last week I was with my wife at the doctor’s office with our brand new baby boy. As we were waiting in the lobby, I started glancing around at the magazines as people are prone to do when they are bored at the doctor’s office. Like every waiting area I’ve ever been to, the magazine selection was shitty at best. However, there was one that caught my eye, mostly because it had Jake Gyllenhaal on the cover and I have a bit of a man crush on him. I’m not ashamed. But I was also intrigued because it was WebMd’s magazine. I had no idea they had a magazine. Did you? Don’t lie. No one knew.
As I flipped through the magazine, I was impressed with the amount of content and how it was probably very relevant to hospitals and doctor’s offices. I imagine, too, that it is free. I would be very surprised if they charged for a subscription. Can you imagine a company creating something like a magazine and all the cost that goes into writing, printing, and shipping and then giving it away for free? I can.
While it seems counterintuitive to not take advantage of such a potentially lucrative income stream, there is actually a very good reason to give it away for free. Ads.
Being free, there is very little reason for someone to refuse shipment of the publication. Therefore, they can quickly accrue a rather large audience of doctor’s offices and hospital waiting rooms. The larger the audience, the more they can charge advertisers for the placement of their ads. So by giving up one revenue source, which could potentially limit circulation (subscription), they can generate even more revenue through ads due to the number of places where those ads could be seen.
Genius, right? I thought so.
Leveraging an Audience
But it doesn’t stop there. Not only does the magazine generate revenue through ads, WebMd also uses it to increase brand awareness by promoting their various mobile apps and websites. As a piece of marketing, it satisfies multiple company goals. It creates awareness for their products and attracts a very specific targeted audience to their various sites. But it also does something that most marketing departments can’t: it generates revenue apart from the main product (in this case they don’t sell a product, but the point of their marketing would be to drive traffic to their site, which would be their primary source of income).
In 2016, WebMd generated $705 million in revenue. Not too shabby for a company that doesn’t really have a product to sell. Of that $705, $561.3 million was advertising. I imagine they also make a pretty penny from all the data they collect from users and subscribers. Then you have the apps. They have made substantial investments to create valuable mobile apps. They are:
WebMD Pregnancy App
WebMD Baby App
WebMD Allergy App
WebMD Pain Coach App
WebMD Magazine App
Holy crap. I had no idea. Even as I’m writing this, I’m blown away. If each app is ad based and collects data to sell…well, you get the idea.
Suffice to say, WebMd is not just a website offering free information. They are a media company that talks about health and medicine. This all started from a site giving away free information. As they built an audience, they were able to start selling ads. Then, as the audience grew, they were able to expand into magazines and mobile apps, all of which are free to the user and sponsored by ads. WebMd has been able to diversify its revenue stream to an incredible extent.
I would be surprised if WebMd isn’t already working on a live event. If I were them, that would be the next step. They have generated a huge audience (in December 2016 their site registered 179.5 million unique and generated 3.63 billion page views for the quarter) and create additional value for that audience via their magazines and apps. The next step would be to create a live event for anyone in the health industry and sell sponsorships and booths in addition to the cost of entry. Many big events charge anywhere between $900-2,000 (often even more) per person. An event of this magnitude would be an excellent source of income and further establish WebMd as more than a website, but as a leader in the medical industry.
Using an established audience to sell a product is hardly a novelty. Many innovative companies have been able to do the same thing. I’m currently reading a fascinating book called Killing Marketing by Joe Pulizzi and Robert Rose. The whole premise of this book is basically what WebMd is doing: use your audience to generate a profit apart from your main product or service. They outline how marketing departments need to evolve with the way the buying experience, customer, and technology has evolved. Instead of remaining an expense to a company, marketing can use an established audience to generate revenue. Brilliant.
If you have a loyal following, you also have multiple possible revenue streams. You may not want to create a magazine or mobile app like WebMd did, but you can create a digital download. If you are collecting emails, you can create a newsletter with affiliate links. There are multiple ways to take this audience you’ve created and monetize it.